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Netcall agrees to acquire Telephonetics

In an all East of England, all-AIM affair, Cambridgeshire based Netcall has reached agreement to acquire Telephonetics in Hemel Hempstead in a cash and share deal.

The deal valued Telephonetics at £10.6m prior to its announcement. St Ives based Netcall, which specialises in callback and auto-messaging telephony technology, is planning a conditional placing to raise £4.25m at 19 pence per placing share to part-finance the acquisition and provide working capital.Under the terms of the acquisition, Telephonetics shareholders will be entitled to 0.3077 new Netcall shares and five pence in cash for each share held, representing a premium of just over 27 per cent to the closing price last Friday.The £5.7m cash consideration will be financed by a £4m bridging loan facility and Netcall’s existing cash balances.Netcall’s shares were up over nine per cent to 15p at the close of trading on Tuesday – the day of the announcement – pushing its market cap up to £9.63m.Telephonetics has a large customer base with over 500 deployments, including over 60 per cent of the UK’s NHS acute health trusts, more than 120 central government, local authority, police and education sites and also provides Netcall with a beach head in the financial and legal sectors.The enlarged company would have over 130 employees. Telephonetics directors, James Ormondroyd, Michael Neville and Mark Brooks will join the enlarged group’s board. Netcall said the deal would enable the enlarged group to broaden and improve its product offering through the addition of workforce management and callback products to Telephonetics’ solution portfolio and by offering Telephonetics’ speech automation and data integration solutions to Netcall’s customers. The acquisition is also expected to lead to cost savings, details of which are yet to emerge.In its interims in March, Netcall said it would be pursuing an acquisitive growth strategy “with a view to increasing critical mass, achieving greater market penetration and delivering long term shareholder value.”Henrik Bang, CEO of Netcall said: “The acquisition will significantly enhance the company’s market presence with a substantially larger customer base and broadened product portfolio. “The enlarged group will have a solid financial footing and an established market position enabling it to take advantage of further opportunities as they may arise. “The new Netcall board will continue to pursue an acquisitive growth strategy with a view to increasing the enlarged group’s critical mass, achieving greater market penetration and delivering long term shareholder value.”The deal requires approval from 75 per cent of Telephonetics shareholders at a meeting on July 8. It has already received backing from about 58 per cent.